RE: RE: Caledonia Mining proposes first dividend p

Blanket Gold Mine is now one of the Lowest Cost Gold Producers in both Africa and the World, it highlighted -

The Blanket Gold mine production Au 12,918 ounces of the Gold 99.999% yellow Gold Au metal; - Reported in Q3 were produced - - 12 per cent higher than the 11,560 ounces generated in the second quarter -

CALVF meanwhile well, its financial position continued to improve with almost $25 million of cash on hand - its $.05 per share in cash; increased every quarter after taxes -

- GG: shaft sinking work has reached 51 metres and will continue down to 120 metres - Mascot: Shaft has been re-accessed down to 120 metres and re-equipped

• Underground development work continues at Eagle Vulture Gold Mine production - - with three more Gold Mines it will soon increase the Gold production to go much higher -

Blanket Gold Mines Gold production delivered to the refinery in October 2012 was 4,479 ounces. Caledonia's financial position continues to improve. With $25 million+ of cash on hand Caledonia has sufficient cash resources to invest in its existing projects and also in potential new opportunities."

Nama Base Metals Project, Zambia

The 2012 drilling programme continued with the objectives of further identifying and defining extensions of the mineralised zone identified in 2011 and increasing the confidence level of the information on this mineralised zone.

As at October 25, 2012, 30 holes and 8,400 metres of drilling had been completed and three rigs are currently working on the site.

To date, an area of copper mineralization has been defined as follows:

current identified strike length of 1.3 km and a dip extent of 900 metres;

mineralisation intersected at depths from 98 to 579 metres;

thickness of mineralized zone varies from 10 to 27 metres;

average copper grade of 0.52%; and

possible extensions of the mineralized zone to the west and to depths below 580 metres will be drill tested in future.

The 2012 drilling programme is expected to be completed shortly following which the drill results will be analysed and interpreted.

Caledonia will continue to manage its cash resources so that it retains the financial capacity to progress this project as fast and as far as possible without requiring third party involvement or equity funding.

• RE: the information on this mineralised zone - As at October 25, 2012, 30 holes and 8,400 metres of drilling had been completed. This is more than previously planned and reflects the commencement of the complete in-fill drilling program.

The 2012 drilling programme will be completed shortly following which the drill results will be analysed and interpreted.

• the commencement of cobalt production by June 30, 2013; the submission of an updated copper sulphide mineral resource and reserve statement and as sociated feasibility study and program of operations by June 30, 2013; and the commencement of copper sulphide resource exploitation by March 31, 2015.

• Caledonia’s Board has approved a proposal which it believes will address the requirement of the Zambian government that cobalt production commences by June 30, 2012. This proposal will be discussed with the Zambian authorities and, once ratified, will be communicated to investors.

• Caledonia has sufficient cash resources to cover all of the exploration costs budgeted for 2012 and 2013.

Caledonia will continue to manage its cash resources so that it retains the financial capacity to progress this project as fast and as far as possible without requiring third party involvement or equity funding.